India’s Snapdeal Looks to Join $1 Billion Club

Snapdeal.com, a New Delhi-based e-commerce site, is in the process of raising a $100 million funding round that could give it a valuation of $750 million to $1 billion, according to a person familiar with the situation.

Snapdeal.com

Snapdeal operates a marketplace similar to eBay’s, though it is primarily for businesses, rather than individual sellers. EBay led a $50 million investment in Snapdeal in June that at the time valued the company at around $250 million, and the two companies have been sharing listings across their two sites.

Credit Suisse is leading the funding round, the person said.

With more than 20 million users, Snapdeal is prepping for a possible initial public offering in the U.S. within the next year and is on a pace to reach $500 million in sales in its fiscal year ending in March, said a spokesman. The Indian e-commerce market is expected to grow to $22 billion within the next five years, from about $3 billion today, according to investment bank CLSA.

Snapdeal previously raised funds from a broad group of venture capital firms, including Bessemer Venture Partners, Intel Capital and Nexus Venture Partners, among others. Intel Capital is participating in the current round of fundraising, according to a person familiar with the firm’s plans.

Reaching a $1 billion valuation would catapult Snapdeal in a group that includes Coupons.com and Gilt Groupe. Still, it is far behind Chinese juggernaut Alibaba, which analysts are expecting to IPO at $70 billion or more later this year.

The Snapdeal spokesman declined to comment on the company’s fundraising activities and an eBay spokeswoman also declined to comment.

Snapdeal has been protected from competition from Amazon.com and Wal-Mart because of rules that prohibit foreign firms from selling directly to consumers in India. However, the Trade Ministry there is mulling a changethat could open up more direct-to-consumer sales.

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